Many employers unaware of costs of caregiving economy: report

Staff | January 21, 2019

American companies are facing a caregiving crisis they refuse to acknowledge, according to a report by the Managing the Future of Work project at Harvard Business School.

According to the report, rising health-care and professional caregiving costs, along with changing demographics over the past few decades, have “put great pressure on American employees as they try to balance work and care responsibilities. Yet many employers remain largely oblivious to the growing costs of this hidden ‘care economy’ — costs that hurt employers and employees alike. While companies spend money, time and effort on providing benefits, often those benefits are of little use to employees.”

By not offering benefits that employees actually want and by not encouraging employees to use the benefits they do offer, companies spend millions of dollars in hidden costs as a result of “employee turnover, loss of institutional knowledge and temporary hiring, in addition to substantial productivity costs such as absenteeism and presenteeism,” stated the report. More importantly, workers of all ages and levels of seniority are affected.

“Given the lack of support at work, many employees hide the growing burden of caregiving responsibilities. They struggle to balance the responsibilities of work and caregiving, often dealing with unexpected and recurring care obligations that require mental, physical and financial resources to address them. Individual productivity suffers, inflicting a cost on the employer. Then, when the emotional and physical stress becomes too much, their capacity for work becomes impaired . . . . Eventually, employers often pay another major cost: they lose talented, trained employees.”

Surveys of U.S. employer and employee attitudes about caregiving show there’s a misalignment between what companies provide in terms of caregiver benefits and what employees actually need, according to the report.

It found 73 per cent of employees reported having some type of current caregiving responsibility, while 52 per cent of employers don’t track data on their employees’ caregiving responsibilities. Among self-professed caregivers, 28 per cent admitted caregiving harmed their careers and more than 80 per cent said it affected their productivity.

Employers must view the issue of caregiving “through the lens of talent management, rather than exclusively as another potential expensive benefit,” noted the report. Companies that don’t acknowledge the near-universality of care concerns in their workforce create a culture where employees are hesitant to make their caregiving obligations overly apparent in case there’s a price to pay for that disclosure.

Companies can start changing the workplace culture by conducting a regular care census, the report said, noting a first step is identifying the magnitude and nature of a company’s workforce’s care needs, evaluating the relevance of the existing benefits package and exploring the possibility of expanding benefits to include caregiving.

“Such an approach would help employees better accomplish their predictable and unpredictable life events, while allowing companies to manage their talent pipelines more productively and predictably,” said the report. “Committing to a caring company strategy and designing the tactics required to execute it well should be neither hard nor, ultimately, costly.”